Major revelations from trove of Trump tax records

The New York Times obtained tax-return data for President Donald Trump and his companies that covers more than two decades. Trump has refused to release this information, making him the first president in decades to withhold basic details about his finances.

The returns are not an unvarnished look at Trump’s business activity. They are instead his own portrayal of his companies, compiled for the IRS.

Tax avoidance

Trump has paid no federal income taxes for much of the past two decades.

In addition to the 11years inwhich he paid no taxes during the 18 years examined by the Times, he paid only $750 in each of the two most recent years — 2016 and 2017.

In 2017, the average federal income rate for the highest-earning 0.001 percent of tax filers — that is, the most affluent1/100,000th slice of the population — was 24.1 percent, according to the IRS.

Over the past two decades, Trump has paid about $400 million less in combined federal income taxest han a very wealthy person who paid the average for that group each year.

Trump has also often paid less in taxes than other recent presidents. Barack Obama and George W. Bush each regularly paid more than $100,000 a year in federal income taxes while in office.

Trump did face large tax bills after the initial success of “The Apprentice” television show, but he erased most of these tax payments through a refund. Combined, Trump initially paid almost $95 million in federal income taxes over the 18 years. He later managed to recoup most of that money, with interest, by applying for and receiving a $72.9 million tax refund, starting in 2010.

The refund reduced his total federal income tax bill between 2000 and 2017 to an annual average of $1.4 million. By comparison, the average American in the top 0.001 percent of earners paid about $25 million in federal income taxes each year over the same span.

The $72.9 million refund has since become the subject of a long-running battle with the IRS.

When applying for the refund, he cited a financial loss that may be related to the failure of his Atlantic City casinos. Publicly, he also claimed that he had fully surrendered his stake in the casinos.

Federal law holds that investors can claim a total loss on an investment, as Trump did, only if they receive nothing in return. Trump did appear to receive 5 percent of the new casino company that formed when he renounced his stake.

In 2011, the IRS began an audit reviewing the legitimacy of there fund. Almost a decade later, the case remains unresolved, for unknown reasons, and could ultimately end up in federal court, where it could become amatter of public record.

Business expense

Trump classifies much of the spending on his personal lifestyle as the cost of business.

His residences are partof thefamily business, as are the golf courses where he spends so much time. He has classified the cost of his aircraft, used to shuttle him among his homes, as a business expense as well. Haircuts— including more than $70,000 to style his hair during“The Apprentice” — have fallen into the same category. So did almost $100,000 paid to a favorite hair and makeup artist of Ivanka Trump.

All of this helps to reduce Trump’ s tax bill further, because companies can write off business expenses.

Seven Springs, his estate in Westchester County, N.Y., typifies his definition of business expenses.

Trump bought the estate, which stretches over more than 200 acres in Bedford, N.Y., in1996. His sons Eric and Donald Jr. spent summers living there when they were younger. “This is really our compound,” Eric told Forbes in 2014. “Today,” the Trump Organization website continue store port ,“Seven Springs is used as a retreat for the Trump family.”

Nonetheless, the elder Trump has classified the estate as an investment property, distinct from a personal residence. As a result, he has been able to write off $2.2million in property taxes since 2014.

Consulting fees

Across nearly all of his projects, Trump’s companies set aside about 20 percent of income for unexplained “consulting fees.”

These fees reduce taxes, because companies are able to write them off as a business expense, lowering the amount of final profit subject to tax.

Since 2010, Trump has written off some $26 million in such fees.

His daughter appears to have received some of these consulting fees, despite having been a top Trump Organization executive.

The Times investigation discovered that Trump’s private records show that his company once paid $747,622 in fees to an unnamed consultant for hotel projects in Hawaii and Vancouver, British Columbia. Ivanka Trump’s public disclosure forms—which she filed when joining the WhiteHouse staff in 2017— show that she had received an identical amount through a consulting company she co-owned.

Money-losing businesses

Since 2000, Trump has reported losing more than $315 million at the golf courses. Much of this has been at Trump National Doral, a resort near Miami that he bought in 2012. And his Washington hotel, opened in 2016, has lost more than $55million.

An exception: Trump Tower in New York, which reliably earns him more than $20 million in profits a year.

The most successful part of the Trump business has been his personal brand.

The Times calculates that between 2004 and 2018, Trump made a combined $427.4 million from selling his image.

Other firms, especially in real estate, have paid for the right to use the Trump name.

The Trump Organization — a collection of more than 500 entities, virtually all of them wholly owned by Trump — has used losses to offset the rich profits from the licensing of the Trump brand and other profitable pieces of its business.

The reported losses from the operating businesses were so large that they often fully erased the licensing income, leaving the organization to claim that it earns no money and thus owes no taxes.

Large bills looming

Trump received 50 percent of profits from “The Apprentice,” which debuted on NBC in 2004. He went on to buy more than 10 golf courses and multiple other properties. The losses at these properties reduced his tax bill.

And since he became a leading presidential candidate, he has received large amounts of money from lobbyists, politicians and foreign officials who pay to stay a this properties or join his clubs.

A surge of new members at the Mar-a-Lago club in Florida gave him an additional $5 million a year from the business since 2015. Roofing materials manufacturer GAF spent at least $1.5 million at Dora lin 2018 as its industrywas seeking changes in federal regulations. The Billy Graham Evangelistic Association paid at least $397,602 in 2017 to the Washington hotel, where it held at least one event during its World Summit in Defense of Persecuted Christians.

In his first two years in the White House, Trump received millions of dollars from projects in foreign countries, including $3million from the Philippines, $2.3million from India and $1million from Turkey.

But many of his businesses continue to lose money.

With “The Apprentice” revenue declining, Trump has absorbed the losses partly through one-time financial moves that may not be available to him again.

In 2012, he took out a $100million mortgage on the commercial space in Trump Tower. He has also sold hundreds of millions worth of stock and bonds.

But he appears to have paid off none of the principal of the Trump Tower mortgage, and the full $100 million comes due in 2022. Andif he loses his dispute with the IRS over the 2010 refund, he could owe the governmentmore than $100million (including interest on the original amount).

Trump’s tax records show he appears to be responsible for loans totaling $421million, most of which is coming due within four years.

Should he win re-election, his lenders could be placed in the unprecedented position of weighing whether to foreclose on a sitting president.